Current Events in September 2010

A U.S. district court, at the request of the Federal Trade Commission (FTC), has temporarily shut down an envelope-stuffing operation that allegedly scammed cash-strapped consumers by falsely promising they could make substantial income working home jobs.

The FTC charged that Louis Salatto and his company, Global U.S. Resources, conned consumers into paying up-front fees by making phony promises about the earning potential of their envelope-stuffing operation.

Big ad campaign

According to the complaint, Salatto bought classified ads in local pennysavers and community newspapers that promised weekly earnings ranging from $1,200 to $4,400. Consumers who paid the up-front fee did not receive the materials they needed to do the envelope stuffing, the income promised, or the refund Salatto said they could get upon request.

The court order halts the allegedly illegal tactics of Salatto and Global U.S. Resources and freezes their assets while the FTC seeks a permanent prohibition against the defendants' false and deceptive claims.

Since at least 2005, Salatto has advertised nationwide through large classified advertising networks such as Gateway Media Inc. and National Advertising Network Inc., according to the FTC complaint. Ads in pennysavers and community papers stated "No Experience Necessary! Start Immediately!" They provided a toll-free number at which consumers were instructed to leave a message with their contact information.

Holding the bag

Consumers who responded to these ads received a "registration form" that typically stated they would receive $8 for every brochure they stuffed, plus 25 percent of every sale made as a result of their mailing, the complaint alleged. They were instructed to pay a "refundable" fee -- typically $40 -- by cash, check, or money order.

After paying the fee, consumers typically received either nothing or a pamphlet titled "Secret Home Employment Guide," which listed other bogus work-at-home opportunities and provided instructions on how to market them, the FTC complaint stated. Consumers who requested refunds were typically unable to reach anyone, and could obtain the refunds only by submitting a complaint to a Better Business Bureau (BBB) or law enforcement agency.

Catherine of Long Beach, CA, got burned by one such operation. "I answered an Ad in the paper, American Publication, for stuffing envelopes," she tells ConsumerAffairs.com. "I sent the requested $40.00 money order to get started. They, in turn, sent my info to Freedom Publications who requested another $39.95. BBB came up with a different company for the phone number. No refund given to date."

Then there's Jeremy of Kasson, MN, who tells ConsumerAffairs.com how he dodged a bullet. "I responded to an ad that claimed you could get paid $25000-$5000 per month, for stuffing envelopes, at a rate of $5 per envelope stuffed." He says because there was no up-front money requested, he asked for more information. "What I got back was a single piece of paper, giving me little more info than I already had, and asking for a $40 registration fee to get started. Now I am smart enough to know that you never send money to a PO Box -- particularly one out of state -- with little or no information on the legitimacy of the opportunity. As I researched thing further, I came to the conclusion that this is without a doubt a scam."

Gilenya is the first oral drug that can slow the progression of disability and reduce the frequency and severity of symptoms in MS, offering patients an alternative to currently available injectable therapies, said Russell Katz, M.D., director of the Division of Neurology Products in the FDAs Center for Drug Evaluation and Research.

Gilenya, made by Novartis AG, is the first in a new class of drugs that block some blood cells in lymph nodes, reducing their migration to the brain and spinal cord, which may help with reducing the severity of MS.

The drug has also been approved in Russia and is awaiting approval in other countries. Merck is now selling a similar MS drug, cladribine, in Australia and Russia and is expecting approval in the U.S. later this year.

MS is a chronic, often disabling, disease that affects the central nervous systemthe brain, spinal cord, and optic nerves. According to the National Multiple Sclerosis Society, there are about 400,000 people in the United States and 2.1 million people worldwide with MS.

The progress, severity, and specific symptoms of MS are unpredictable and vary from one person to another. Symptoms can be mild, such as numbness in the limbs, or severe, such as paralysis or loss of vision.

Patients using Gilenya should be monitored for a decrease in heart rate upon starting the drug. Gilenya may also increase the risk of infections. Cases of serious eye problems (macular edema) have occurred in patients taking the drug and an ophthalmologic evaluation is recommended.

The most frequent adverse reactions reported by patients taking Gilenya in clinical trials include headache, influenza, diarrhea, back pain, elevation of certain liver enzymes and cough.

The drug will be available in 0.5 milligram capsules.

Read more about Multiple Sclerosis.

The Michigan Office of Financial and Insurance Regulation (OFIR) has ordered "Whitestone Credit Union" to cease and desist from doing business. The agency said it appears that Whitestone, through its website and telephone answering service, was posing as a legitimate credit union when it was anything but.

While banks' reputations have suffered over the last few years, many consumers tend to look with more favor on credit unions. Authorities believe scammers are increasingly trying to exploit that trust.

"It looks like these scammers were posing as a legitimate credit union in order to obtain information used in identity theft," OFIR Commissioner Ken Ross said. "Consumers are encouraged to call OFIR if they believe they have discovered one of these classic phishing scams."

Ross says the fraudulent financial institution was encouraging customers to apply for loans by providing personal information including social security and financial account numbers. Whitestone's website is currently shutdown.

The agency urged consumers to develop a face-to-face or personal relationship with a financial institution before entering into a business contract. Prior to opening an account at an Internet bank or credit union, consumers are encouraged to call their state bank regulators to verify the institution is legitimate.

In 2007 the Credit Union National Association warned consumers that an email phishing scheme was falsely using the organization's name to collect personal information. The scam, the group said, was seeking to exploit credit unions' standing among consumers.

Read more scam alerts

Transportation Secretary Ray LaHood is backing the effort and got support this week from consumer and travel groups including the Consumer Travel Alliance, the National Consumers League, and the Business Travel Coalition.

LaHood met with representatives of the groups this week in Washington. The groups, among other things, want mandatory disclosure of all airline fees.

"Airline passengers have rights and should be able to expect fair and reasonable treatment when they fly," LaHood told the groups. "We're proposing to strengthen consumer protections and raise the bar for airlines when it comes to treating passengers fairly. I appreciate the views of consumers and hope they will continue to weigh in on this important issue."

Advertised fares don't include fees

Airlines advertise fares on their websites and other travel booking sites, but the fare does not include fees for baggage or other. Since fees vary from airline to airline, it's not immediately clear to consumers what the actual cost of making the flight will be.

Airlines say the cost to each passenger will differ, depending on how many bags they have, how much they weigh, and what other services they might want. For competitive reasons, airlines also prefer to advertise the lowest possible fare. The consumer groups contend those lower fares are misleading.

"Without fee transparency, it is impossible for air travelers to know the full cost of their flights or compare prices among various airlines, said Charlie Leocha, Director of the Consumer Travel Alliance. Hidden airlines fees have inspired nationwide anger among air travelers, and we commend the Secretary for his efforts to fix the problem."

In a letter to LaHood, the groups said they are not calling for regulation of the amount of the fees. They simply want, they say, for consumers to be able to determine the true cost of the fare.

Hidden fees

"Hidden fees are a violation of a traveler's most basic right: to know how much they will have to pay for their trip, the letter states. When two out of every three air travelers say they have been surprised by hidden fees at the airport, you know the current system is broken and needs to be fixed.

The groups say they want airlines to disclose their fees to every traveler, through every ticketing channel in which they participate, to every point of sale. With the airline world of fees so complex with so many variations on each fee, they contend this is the only way consumers can compare prices on the total cost of travel.

"The airlines have every right to make a fair profit and set fares and fees that allow them to do so, the letter concludes. But they have no right to try to hide those prices from their customers."

The first phase of new federal regulations protecting consumers from unscrupulous debt settlement companies takes effect September 27, part of the government's effort to corral the scam artists who dominate the industry.

Debt settlement companies often promise desperate consumers they can reduce their credit card debt, but charge a large upfront fee. Little or no effort is made to settle the debt and the consumer is left in worse shape than before.

The initial changes in the Federal Trade Commission regulations govern how debt relief products are marketed to consumers.

Specifically, the new rules prohibit debt services providers from misrepresentations regarding their program, success rates or any material program features. Companies are also required to disclose potential negative consequences of a settlement and how long it might take for a consumer to realize results.

"This is really a best case scenario for consumers," said Brad Stroh, CEO of Bills.com, an online financial resource. "Consumers will now have substantial and important protections in place to ensure that they are not taken advantage of by predatory debt relief providers. At the same time, responsible providers will be rewarded for their efforts and can stand apart from less reputable companies - making it even easier for consumers to find help from the good actors in the debt relief industry."

Phase two

The second sets of changes take effect on October 28, 2010. This second step will restrict debt relief companies from charging any fees until the consumer has received either interest rate or principal reductions from their creditors.

This addresses one of the most-often criticized aspects of the industry, where a debt relief company could collect up-front fees without having to resolve any consumer debt. With these changes, consumers are protected from unscrupulous providers.

"The timing of these changes is important because the still struggling economy means that many Americans and families remain in financial peril," Stroh said.

States take lead

The new federal rules are designed to provide support to a number of states that have long waged a fierce battle against predatory debt settlement firms. Earlier this year Illinois passed a law to prohibit debt settlement firms from engaging in unfair and abusive practices.

"Debt settlement operators target hardworking people with crushing credit card balances. They claim they're able to pay off your debt for a fraction of what's owed, but most times, this turns out to be a scam," said Illinois Attorney General Lisa Madigan. "They take your money and almost never reduce your debt.

In Oregon, meanwhile, Attorney General John Kroger this year reached an agreement with Credit Solutions of America (CSA) that cracks down on the Texas-based debt settlement company's alleged practice of charging high upfront fees and encouraging consumers to quit paying their creditors.

"CSA's existing Oregon customers may be entitled to a partial refund if they are not satisfied with the service they get," Kroger said.

CSA is the largest debt settlement company in the country and has a national client base. Oregon consumers complained that CSA charged very high up-front fees and encouraged clients to stop paying their creditors. There were frequent allegations that a lack of effort on behalf of CSA resulted in litigation and costs levied against consumers.

Also in 2010, Minnesota sued American Debt Settlement Solutions, Inc. of Boca Raton, Florida; Debt Rx USA, LLC of Dallas, Texas; FH Financial Service, Inc. of Dallas, Texas; Morgan Drexen, Inc. of Anaheim, California; Pathway Financial Management, Inc. of Garden Grove, California; and State Capital Financial, Inc. of Hallandale Beach, Florida, claiming the six companies violated the state's new debt settlement law.

Read more about debt settlement and consolidation.

There have been so many U.S. home foreclosures that loan servicers have had trouble keeping up with the paperwork. That may provide a glimmer of hope for some who are fighting to keep their homes.

It turns out that Ally Financial, which operates GMAC Mortgage, may have employed a robo signer" to plant the signature of company executive Jeffrey Stephan on thousands of foreclosure documents. But there's just one problem; the law required Stephan to read the document and sign it in the presence of a notary public.

In sworn deposition for a lawsuit by a homeowner challenging her eviction, Stephan admitted he didn't do either one.

In fact, Ally Financial was being snowed under in foreclosure paper. A reported 10,000 documents crossed Stephan's desk each month, all requiring him to read and sign them.

Shock wave

The revelation this week that he took a shortcut sent a shock wave through the financial industry, prompting reports that Ally Financial had stopped all foreclosures in 23 states. The company says that's not the case.

The speculation likely emanates from a direction previously given by GMAC Mortgage to certain of its outsource vendors to allow time to address a potential issue that was raised in a number of existing foreclosures challenging the internal procedure we used for executing one or more judicially required forms, the company said in a statement.

This direction was to suspend evictions and REO closings where the related foreclosure could have been impacted by the same internal procedure. We are also reviewing certain previously completed foreclosures where the same procedure may have been used.

While the lenders may have had legitimate cause to foreclose, the mishandling of the paperwork has given homeowners ammunition in their fight against foreclosure and has drawn the attention of state law enforcement officials.

No comment

We are unable to comment on the specific merits of the challenge because some of them are in litigation, Ally Financial said. Nevertheless, a new process has already been developed and implemented so that though some existing foreclosures may experience delays while corrective action is taken, there will be no interruption in new foreclosures. These delays are expected to be resolved within the next few weeks and certainly before year end, without serious consequence.

Ally Financial says GMAC Mortgage has been addressing the procedural challenge for more than three months and that its mortgage business is operating as usual.

Attorneys representing homeowners may see it differently. The Washington Post reports that some of the nation's largest mortgage companies also used the GMAC processor, perhaps opening the way for further challenges.

The default rates for student borrowers are considerably higher for those who attended public schools than those who attended private ones. Due to a lackluster economic turnaround and high unemployment, it's no surprise that student borrowers are struggling to make loan payments.

Financing tips

Financial experts at Money Management International (MMI) are offering the following tips for managing the cost of a higher education:

• Look for scholarships. Scholarships are the best way to pay for school; it's free money that doesn't require repayment. There are several online sources to help students find great scholarships, such as FastWeb, FinAid, and the Financial Aid Resource Center.

• Apply for federal grants. Obtaining a grant is another way to pay for college with free money. To secure federal grants fill out the Free Application for Federal Student Aid (FAFSA). Also, check out the Academic Competitiveness Grant or the National Science and Mathematics Access to Retain Talent or SMART grant.

Easier said than done, according to some of the folks who have written ConsumerAffairs.com.

"They (U.S. Department of Education) hold my student loan and refuse to come to an agreement about a monthly payment," writes Catherine of Rhinelander, WI. "They stated they want a debit or credit card number or my checking account number, which I will not do. They just refuse to work with me with me not being willing to give my checking account number. It's impossible to get this debt taken care of."

Mary of Jamestown, KY, found herself in a Catch-22 situation. "Young people that can't afford to go to college have left home and are working can't apply for a Pell Grant based on their own income but must show their parents tax returns as their own income until they are 25 years old," she tells ConsumerAffairs.com. "Now isn't that clever it looks like cheap way to cheat this country out of giving a fair chance for an education. Who benefits from taxes anyway?"

• Choose the right school. Sometimes affording tuition is as easy as choosing a school that fits your family's budget. It is cheaper to go to school in-state vs. out-of-state. Also consider a public funded school over a private school. Students can find a college cost comparison tool and apply for financial aid.

• Finally, consider an alternative program. "There are other programs that are just as rewarding, but cost significantly less than a university program," said Cate Williams, vice president of financial literacy for MMI. "For example, instead of a four year nursing degree that could cost up to $40,000, consider a certification program in respiratory therapy at a community college for only $27,300."

Discount club marketer Webloyalty.com, Inc.will refund defrauded consumers who were charged unauthorized fees and will also pay $5.2 million in penalties, costs, and fees to the state of New York, a total settlement worth $8.5 million.

The company is just the latest to make amends for charging consumers' credit cards without proper consent. Separately, Attorney General Andrew Cuomo obtained settlements with five retailers who have partnered with Webloyalty: Ticketmaster LLC; Pizza Hut, Inc.; Orbitz Worldwide, LLC; Shutterfly, Inc.; and MovieTickets, Inc.

The settlements require the retailers to collectively pay over $3.3 million for consumer refunds, education, and fees, and require that they reform their marketing arrangements with discount club sellers.

Cuomo's investigation into the discount club industry found that when consumers completed online purchases from familiar retailers, they were often presented with a cash-back or discount offer from a marketer like Webloyalty. Information about accepting the offer and its ramifications - including the fact that the consumer was agreeing to transfer his or her credit or debit card account information - was buried in fine print and cluttered text.

Since consumers were not required to provide their financial information as part of the enrollment process, they often accepted the offer without knowing they were joining a fee-based program.

'Buying' without knowing it

Once enrolled in a discount club, recurring charges begin to appear on consumers credit or debit card from unfamiliar companies. Due to their low dollar amount or the non-specific club names on consumers account statements, the charges often go unnoticed.

In this all too common Internet scheme, consumers were tricked into paying for monthly services for a discount club while shopping online at trusted retailers, Cuomo said.

According to the settlement, Webloyalty must:

• Fully refund fees charged to certain consumers who unknowingly enrolled in or did not authorize billing for Webloyalty discount clubs and programs

• Permanently end its practice of obtaining consumers billing information from online partner retailers

• Reform its online marketing practices to ensure consumers understand they are enrolling in a program offered by Webloyalty for which they will be billed

• Make redemption forms for rebates immediately available to consumers online

Last month, Cuomo obtained more than $10 million in settlements with Affinion Group, Inc., its subsidiary Trilegiant, and other retailers engaged in discount club schemes.

Discount clubs generate billions of dollars each year, much of which has been amassed through fraud, and retailers have obtained millions of dollars in revenue for passing customers credit card information to the programs.

Amid recent news of weak durable goods growth and the continued uncertainty of the housing market, the ACSI results may provide a glimmer of hope for future demand for these durable products.

"In order for demand to rebound, consumers must exhibit an increased desire to spend and have the means to do so," said Claes Fornell, founder of the ACSI and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference. "ACSI data suggest that for durables, the first condition has been met in the form of higher customer satisfaction. Whether this will translate into increased consumer demand will depend on positive movement in the factors that impact the means to spend: employment, wages and access to credit."

Personal computers

Satisfaction with personal computers surged 4.0 percent to match the all-time industry high of 78 on the ACSI's 0 to 100-point scale. Apple gained two percent to 86 -- its highest score ever. This marks the seventh straight year that Apple leads all other PC makers, and the 9-point gap between Apple and its nearest competitor is the largest in ACSI.

That's not to say Apple is without its critics. Karine of Mt-Tremblant, Canada says the IMAC she bought in 2008 for $2900 has been nothing but trouble. "Barely 15 months after purchase, I had a kernel attack," she writes ConsumerAffairs.com. "I paid $750 for a repair that didn't fix the issue. I had to bring the computer back to the store three more times, and it only made it worse. I am bitter and will not buy another Mac in the future."

Many Windows-based machines also improved and no brand declined. Dell improved three percent, while Acer (Gateway and eMachines) and the HP division of Hewlett-Packard both rose four percent, forming a three-way tie at 77-well behind Apple. These companies were joined by the aggregate of all smaller PC makers, such as Sony and Toshiba, which gained four percent to 77.

"Windows-based PC brands appear to have recovered from the problems associated with the Windows Vista software," said Fornell. "Barely a year into the release of Windows 7, satisfaction with these brands has returned to -- and in some cases even surpassed - the levels prior to the launch of Vista."

PC makers have benefited overall from better customer service, although this service continues to lag far behind other durable goods industries. PC owners who had reason to contact customer support are eight percent less satisfied than those with no post-purchase contact with the manufacturer or retailer.

Major Appliances

Customer satisfaction with major appliances such as refrigerators, stoves, dishwashers, and washers and dryers improved 1.2 percent to 82 -- matching a 10-year high. Whirlpool is atop the industry, unchanged at 83. 2010 marks the 15th year in a row that Whirlpool has had at least a share of the industry lead. GE closed the gap with Whirlpool, gaining five percent to 81 and rebounding from a big drop last year.

GE's climb tied the manufacturer with the aggregate of all smaller appliance makers, which improved three percent to 81. Electrolux rounds out the industry, unchanged at 79 and matching a five-year low.

GE does not rate highly with Mike from Villa Hills, KY, who says that after using all GE appliances for 26 years in his previous house with minimal problems, his wife insisted on GE when they moved to another house.

"We bought flat top stove, dishwasher and over-stove microwave," he writes ConsumerAffairs.com. "At 14 months the microwave broke. Entire insides had to be replaced. At 32 months, motor went out on dishwasher. At 39 months, the front burner on the stove went out frying the on-off switches also. My solution, never buy anything with GE associated by name or make."

Consumer electronics

Satisfaction with home electronics such as televisions and DVD or Blu-ray Disc (BD) players increased 2.4 percent to 85 -- the best-ever score for the category and the highest level of customer satisfaction for any ACSI industry thus far in 2010.

Greater affordability has made these products more attractive. For the first time, prices for some flat-screen TVs have fallen below $500. Prices for DVD and BD players have dropped as well, translating into better value for money, with a positive effect on customer satisfaction.

Read more about appliances, computers and electronics.

Researchers also found participants with the highest dairy calcium intake, equal to 12 oz. of milk or other dairy products (580 mg of dairy calcium), lost about 12 pounds (6 kg.) at the end of the two years.

By way of comparison, those with the lowest dairy calcium intake averaging about 150 mg dairy calcium, or about half of a glass, lost only seven pounds on average. The study was published in the current issue of the American Journal of Clinical Nutrition.

Beyond calcium, the researchers also found that blood levels of vitamin D independently affected weight loss success. Vitamin D levels increased among those who lost more weight. The dietary intervention study also confirmed other research that overweight participants have lower blood levels of vitamin D.

More than 300 overweight men and women, aged 40 to 65, took part in the study that evaluated low fat, Mediterranean or low-carb diets for two years. Dr. Danit Shahar, of BGU's S. Daniel Abraham Center for Health and Nutrition and the Faculty of Health Sciences, led the study, which was part of the Dietary Intervention Randomized Control Trial (DIRECT) conducted at the Nuclear Research Center in Israel.

The vitamin D factor

"It was known that overweight people had lower levels of serum vitamin D, but this is the first study that actually shows that serum Vitamin D increased among people who lost weight," according to Dr. Shahar. "This result lasted throughout the two years that the study was conducted, regardless of whether they were on a low-carb, low fat or Mediterranean diet."

Vitamin D increases calcium absorption in the bloodstream and in addition to sun exposure can be obtained from fortified milk, fatty fish and eggs. Americans generally consume less than the recommended daily requirement of Vitamin D, which is found in four glasses of milk (400 international units).

Read more about Weight Loss

U.S. airlines are having a very good year, thanks to a more streamlined schedule -- i.e., fewer flights -- and an assortment of new fees on passengers.

The Air Transport Association of America (ATA), the industry trade organization for the major U.S. airlines, reports that passenger revenue, based on a sample group of carriers, rose 17 percent in August 2010 compared to the same month in 2009.

It marks the eighth consecutive month of revenue growth, though the group notes the pace of improvement slowed from the 25 percent and 20 percent year-over-year gains realized in June and July, respectively.

So does this mean more people are eagerly taking to the skies? Not really. It basically means that roughly the same number of people are flying. They're just paying more for the privilege.

Approximately one percent more passengers traveled on a sample of U.S. airlines in August while the average price to fly one mile rose 14 percent. International passenger revenue rose 27 percent, led by a 44 percent gain in trans-Pacific markets.

Passenger spending is up

"Spending on air travel remains well above last year's depressed levels, but the industry is wary of a possible slowdown in the nation's economic recovery as it enters the traditionally slower fall period," said ATA President and CEO James C. May.

Airlines are also making more money hauling cargo. A sample of U.S. airlines saw cargo traffic, as measured in cargo revenue ton miles, rise 15 percent year over year in July 2010, driven by increased international trade. August 2010 cargo data is not yet available.

Annually, commercial aviation helps drive more than $1 trillion in U.S. economic activity and nearly 11 million U.S. jobs.

On a daily basis, U.S. airlines operate approximately 25,000 flights in 80 countries, using more than 6,000 aircraft to carry an average of two million passengers and 50,000 tons of cargo.

Most major airlines now charge fees for checked bags, often adding more than $100 to the price of a ticket. Southwest Airlines, which does not charge fees for checked bags, has made that distinction the centerpiece of its current advertising campaign.

Earlier this year Spirit Airlines expanded the bag fee frontier even further by introducing a fee for carry-on luggage.

We've had the War on Terror and the War on Drugs and now, if a group of influential senators have their way, we'll soon have the War on Free Movies and Music.

At least it goes to show that in Washington, where the politicians like to stage mock battles to show the folks back home how serious they are about waging war on the other party, there's still room for compromise: a "bipartisan" group of senators led by Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) and senior Republican member Orrin Hatch (R-Utah) have introduced legislation that they say will "address the growing problem of online piracy and counterfeiting."

You didn't know this was a growing problem? Oh well, you must not be a record company or movie producer. You probably haven't had a chance to tell your senators what your growing problems are but ... well, you know, maybe someday.

Anyway, Leahy & Co. have introduced the Combating Online Infringement and Counterfeits Act which they say would "give the Department of Justice tools to track and shut down websites devoted to providing access to unauthorized downloads, streaming or sale of copyrighted content and counterfeit goods," according to Sen. Leahy's office, which noted darkly that such "illegal products" are offered through websites that are "often foreign-owned and operated."

Leahy's press release said intellectual property theft costs the U.S. economy more than $100 billion every year, according to estimates that weren't further identified. Many of these thefts amount to someone listening to a song or watching some or all of a movie online. Always unanswered is whether these entertainment-crazed pirates, their lusts unsated, later buy a CD, attend a concert or go to a movie so they can see or hear more of the "stolen" intellectual property.

Each year, online piracy and the sale of counterfeit goods cost American businesses billions of dollars, and result in hundreds of thousands of lost jobs, said Leahy. The Combating Online Infringement and Counterfeits Act will protect the investment American companies make in developing brands and creating content and will protect the jobs associated with those investments. Protecting intellectual property is not uniquely a Democratic or Republican priority it is a bipartisan priority.

'Jack-Booted Thugs'

But hold on there, pardner. Not everyone is saddling up for this posse. The Electronic Frontier Foundation (EFF) warns that caution should be the order of the day when it comes to shutting down Web sites and prosecuting alleged content thieves.

"Giving government agents a reason to censor, search, seize, and indict must be taken very seriously. Without safeguards and a thorough accounting of the consequences, laws and policies targeting so-called 'pirates' can be used to pry away human rights and undermine fundamental elements of democracy and freedom," said EFF's Richard Esguerra in a recent blog entitled Jack-Booted Thugs and Copyright Enforcement.

Esguerra noted that it was only last week that The New York Times broke the news that Russian authorities raided an environmental group's office and confiscated their computers, using as their excuse the allegation that the organization was using unauthorized copies of Microsoft software.

To its credit, Microsoft manned up and swiftly proclaimed that any software used by the group and its allies was licensed.

Esquerra notes that, shocking though the Russian incident was, the issue isn't limited to software. With perhaps Leahy & Co. in mind, he said that a "sprawling, powerful group-of-groups in the content industry, including movie and music industry lobbyists, software companies, and others, is constantly demanding that governments worldwide be given new powers to search for and seize allegedly pirated materials, and that those governments should act on those powers forcefully."

"In the name of copyright enforcement, the lobby shortsightedly demands provisions that put human rights at risk throughout the world: the power for governments to censor parts of the Internet with so-called copyright filtering, power for governments' border agents to search travelers' goods for "infringing" items, power for governments to detain alleged infringers pre-trial," Esquerra warned.

Other collaborators

The legislation is cosponsored by Committee members Herb Kohl (D-Wis.), Arlen Specter (D-Pa.), Chuck Schumer (D-N.Y.), Dick Durbin (D-Ill.), Sheldon Whitehouse (D-R.I.), and Amy Klobuchar (D-Minn.). Senators Evan Bayh (D-Ind.) and George Voinovich (R-Ohio) are also cosponsors.

The senators said the measure would:

• Give the Department of Justice an expedited process for cracking down on websites that are dedicated to making infringing goods and services available;

• Authorize the Department of Justice to file an in rem civil action against a domain name, and seek a preliminary order from the court that the domain name is being used to traffic infringing material. The Department must publish notice of the action promptly after filing, and it would have to meet clear criteria that focus on the sites substantial and repeated role in online piracy or counterfeiting;

• Provide safeguards allowing the domain name owner or site operator to petition the court to lift the order;

• Provide safeguards against abuse by allowing only the Justice Department to initiate an action, and by giving a federal court the final say about whether a particular site would be cut off from supportive services.

By Jon Hood
ConsumerAffairs.com

Enterprise Rent-a-Car has agreed to settle a lawsuit concerning its resale of scores of rental cars lacking side air bags.

The suit, filed in April, alleged that Enterprise sold 125,000 Chevrolets and Buicks to unwitting consumers who thought -- and, in some cases, were told -- that the cars came with side curtain air bags.

And who could blame them: side air bags were purportedly standard equipment in the Chevrolet Impala, one of the models covered by the litigation. Indeed, the suit notes that every major crash-test rating and consumer buying guide lists front and rear side impact air bags as standard safety equipment on the 2007 and 2008 Impala, and says that GM extensively advertised and marketed the cars as so equipped.

Enterprise requested deletion

But according to the suit, Enterprise specifically requested that the airbags be deleted, allowing it to save around $175 per car. Despite its knowledge that none of the cars had side air bags, the complaint says, Enterprise fraudulently concealed the nonconformity by failing to disclose the deletion of the standard safety features.

The suit covers the 2006, 2007, and 2008 Chevrolet Impala; the 2008 and 2009 Chevrolet Cobalt; the 2009 Chevrolet Heritage High Roof (HHR); and the 2006 and 2007 Buick Lacrosse. Side airbags were standard equipment on the Impala only; they remained optional on the other models.

According to the suit, [a]n examination of a salvaged 2007 Impala originally sold to Enterprise revealed that the space normally occupied by the side curtain head bag was filled with corrugated plastic.

Lead plaintiffs Timothy Withrow and David Tucker both bought 2008 Impalas from Enterprise believing that the cars came equipped with side airbags.

When Connie Wittkopp bought her 2008 Impala, Enterprises website explicitly listed the car as having side airbags in the front and rear, according to a report in the Dallas Morning News. Enterprise, for its part, chalked the misrepresentation up to an online software glitch.

Side-impact crashes common

The suit notes that side-impact crashes are the second most common type of accident, and that side airbags are frequently listed as must-have safety features with the potential to reduce fatalities and prevent injuries and deaths caused by ejections in rollovers.

Indeed, side-impact collisions present the greatest risk, in part because of the small amount of sheet metal separating passengers from the car that hits them. According to Edmunds.com, side-impact collisions accounted for 28 percent of auto fatalities in 2007.

Plaintiffs to receive $100

Enterprise confirmed the settlement through a spokeswoman.

We typically do not comment on litigation, Laura Bryant told UPI last week. However, the parties have negotiated a settlement and are proceeding in good faith.

Under the settlement, which totals $14 million, class members are eligible to receive a $100 coupon toward future car rentals and a nifty yellow sticker reading, No Side Curtain Airbags. The stickers serve less to remind class members that they got a raw deal -- a fact with which they are already intimately familiar -- than to shield them from liability when they decide to sell their cars to a new generation of unsuspecting buyers.

The settlement may appear lacking, but the suit has produced at least one concrete benefit: GM no longer allows fleet buyers to delete standard safety equipment, meaning that you can finally trust those window stickers and buyers guides.

Read more about Enterprise Rent A Car

The Internet Governance Forum in Lithuania is set to consider 12 principles of Internet governance that would, among other things, uphold the existing support of net neutrality.

Under the proposal, countries would agree to work across borders to secure the Internet's infrastructure and to keep it safe from cyber attacks. It would also uphold freedom of expression and association and require that all Internet traffic receive equal treatment, a cornerstone of net neutrality.

Currently, some countries do not allow free expression online, or free access to opinions not favored by particular governments.

"The fundamental functions and the core principles of the Internet must be preserved in all layers of the Internet architecture with a view to guaranteeing the interoperability of networks in terms of infrastructures, services and contents," the proposal states. "The end-to-end principle should be protected globally.

A group called the Council of Europe, made up of 47 member countries, presented the proposal as a way to advance democracy and human rights, it said. It's also viewed as an attempt to blunt various government attempts to increase control over the Web.

In the U.S. the Obama Administration has supported the concept of net neutrality. Late last year the Federal Communications Commission (FCC) voted unanimously today to begin the process of crafting formal net neutrality rules.

"Any rules we adopt must preserve our freedom to connect, to communicate, and to create that is the wonder of the open Internet," FCC chairman Julius Genachowski said at the time. "Each and every user of the Internet must have access to an unlimited online universe of ideas and commerce."

Call it a long shot, but there's a chance Congress could vote to legalize online gambling. The House Financial Services Committee passed a measure that would lift the existing prohibition last month, making it at least possible the full House could vote on the bill despite opposition from Republicans.

With the government scrambling for funds, it's becoming increasingly difficult to look the other way as billions of dollars in potential tax revenue slips away. Congress' Joint Committee on Taxation estimates legalizing online gambling could bring in more than $40 billion in new tax revenue over the next decade.

Stacked up against a deficit in the trillions, that might not sound like much but a few extra billion here and there certainly couldn't hurt.

Officially known as the Internet Gambling Regulation, Consumer Protection, and Enforcement Act of 2009 (H.R. 2267), the bill sponsored by Rep. Barney Frank (D-Mass.) would set up a federal regulatory and enforcement authority that would license gambling operators to accept bids from consumers in the United States.

We now make it illegal for adults to gamble on the internet, Frank said in a recent appearance on the Jay Leno Show. If you have some guy who wants to play poker on the Internet, we say its illegal. Why [anybody] thinks thats the governments business is beyond me. We could make billions of dollars a year by making it legal and taxing it.

Under Frank's bill, gambling sites would be required to maintain "effective protections against underage gambling, compulsive gambling, money laundering and fraud, and enforce prohibitions or restrictions on types of gambling prohibited by states, and Indian Tribes."

Online gambling has been illegal ever since October 2006, when Congress passed the Unlawful Internet Gambling and Enforcement Act. There are those who say the law hasn't done much other than starve the government of tax revenue, since gambling -- like drug usage, drinking, prostitution, rolling past stop signs and other human vices -- continues to occur, even when it's illegal.

Lately, however, the feds have been moving aggressively against financial institutions tied to online gambling, using the provisions of the Unlawful International Gambling Enforcement Act (UIGEA), which went into effect in June. The law, passed in 2006, aims to stop online gambling by preventing credit card companies and banks from processing funds transfers for unlawful internet gambling.

Just last week, Goldwater Bank in Scottsdale, Ariz., agreed to forfeit $734,000 in assets tied to money laundering and illegal online gambling operations, the FBI said. The one-branch bank was accused of transferring funds for several online gambling sites, including PokerStars, the worlds largest online poker room. At least $13 million was transferred in the first half of 2009 according to federal reports.

Although Goldwater Bank denies guilty knowledge of its role in facilitating an illegal online gambling business, it was paid to execute transactions that were essential to the operation of this criminal enterprise, said Janice Fedarcyk, the FBIs Assistant Director in charge, in a statement. The forfeiture settlement means the bank wont profit by providing this service.

Underground, under-regulated

Prohibiting online gambling has simply forced it underground, critics say. Most Web sites have stopped accepted advertising for gambling sites and credit card issuers have stopped processing payments from gambling sites located in the U.S. But since gambling is legal in much of the rest of the world, online sites continue to operate and can be easily accessed by any American armed with a keyboard and a mouse. The problem, as Frank and others see it, is that without effective licensing and regulation, U.S. gamblers lack even the most basic protections.

Of course, all bets could be off if the Republicans gain control of the House in the upcoming midterm elections, since most of the opposition to legalized gambling comes, oddly enough, from conservatives who say government should stay out of citizens' private lives. There's also opposition from some but not all casinos.

The committee voted to approve Frank's bill 41-22, with one member voting present. The final tally appears below.

The Retirement Income Deficit is based on projections of retirement income and wealth for American workers ages 32-64. The figure was calculated for Retirement USA by the Center for Retirement Research at Boston College, using methodology developed for the Centers National Retirement Risk Index.

The calculation is based on an analysis of about 70 million households comprising people in their prime earning years, between 32 and 64. There is an average deficit of about $90,000 in retirement savings for each household.

"The number should be a wake-up call," said Maria Freese, director of government relations and policy for the National Committee to Preserve Social Security and Medicare. " It is a measure of how far behind Americans are in their retirement savings today. Cuts to Social Security, pension freezes, and 401(k) losses on the stock market could easily make the Retirement Income Deficit much, much worse in the future.

The key sources of income that retirees have relied on are either under attack in the case of Social Security or disappearing in the case of traditional pensions, said Ross Eisenbrey, vice president of the Economic Policy Institute, 401(k) plans are not working, and millions of workers have neither a pension nor a 401(k) account. Clearly, the current private retirement system is failing most Americans.

Featured at a press conference announcing the campaign were two women who shared their own personal retirement income deficit stories and who will be part of a "story bank" the group is assembling: Shareen Miller of Falls Church, Va., and Constance Canby Morton of Westmoreland County, Va.

Miller is a personal care assistant who has no retirement plan through her employer. She is afraid that she will never be able to retire, but she is also worried that she will not be able to continue to work in her physically demanding job as she ages. Canby Morton is a 66-year-old retiree who has neither a pension nor a 401(k). She and her husband have health issues, which have eaten into their savings, and they rely solely on Social Security.

The story bank shows that the Retirement Income Deficit is not merely an abstraction, said Gail Dratch, legislative representative for the AFL-CIO. The crisis impacts Americans of all ages and from all walks of life. These are the faces behind that number.

Retirement USA is a campaign for a new retirement system that, along with Social Security, will provide universal, secure, and adequate income for future retirees. The AFL-CIO, the Economic Policy Institute, the National Committee to Preserve Social Security and Medicare, the Pension Rights Center, and the Service Employees International Union are the campaign's primary supporters.

Scam artists are trying to hit the airwaves with offers for free purebred puppies in their latest efforts to dupe consumers out of hundreds of dollars, ConsumerAffairs.com learned.

In this latest twist to the old free puppy scheme, swindlers recently approached a Missouri radio station about buying air time to run ads for free Yorkshire Terrier, English Bulldog, and Maltese puppies.

They are vet checked, very healthy, and also friendly, a fraudster who used the name Tom Jones wrote in an e-mail to a St. Louis radio station. I will want the ad to run for 3 weeks so let me know the cost if you can't run the ad for free. In another ad, a con artist using the name R Miller said he wanted his ad for free Yorkie Terrier puppies to run for two weeks.

The radio station didnt air the ads, but an investigator with the St. Louis Better Business Bureau (BBB) responded to the person claiming to have the free English Bulldog puppies. A few days later, Investigator Bill Smith received a reply from a pastor who said he and his family recently moved to Africa to do missionary work.

We have the puppies right here with us, Pastor David Sanchez wrote in an e-mail. Both of them are my darling sweetheart and super spoiled!

Pastor Sanchez, however, said his family didnt want to keep their babies -- 10-week-old Bella and Max -- in Africa because of the weather.

I am giving them out because of (sic) bad condition and we're spending months for the Christian mission and I don't want Bella and Max to die in this bad weather, he wrote.

Although Pastor Sanchez repeatedly said the puppies were free, he asked Smith to split the cost of transporting them to the United States.

We both will be responsible for the shipping cost, he wrote in the e-mail, which also contained pictures of the puppies. Smith soon learned that Pastor Sanchez wanted him to wire $450 -- using Western Union -- to a person in Nigeria that he identified as Wale Peters with the Overseas Diplomatic Courier Service Company.

It will be better if you can do the transfer at any grocery store closest to you, Pastor Sanchez wrote. Once again, note that you have to make the transfer via western union only. When Smith told Sanchez he couldnt afford to wire that much money, the so-called man of the cloth quickly lowered the shipping fee.

I just spoke to my wife about your message and she said I should inform you to proceed and send $150 right away while we meet up with the rest balance, Pastor Sanchez said. We don't really have much on us but act fast to enable the shipping.

"Max" and "Bella" as seen in an email from "Pastor Sanchez"

Not new

Puppy scams like this arent new or limited to the Midwest, Smith said.

These are a nationwide problem, he told ConsumerAffairs.com. And theyve been going on for a few years. The BBB and the American Kennel Club issued a joint release about this issue back in 2007. This is, however, the first time weve noticed a radio station has been solicited to put ads on the air for free dogs, he added.

In most cases, the thieves behind these schemes run ads in newspapers or on Internet sites like Craigslist. The ruse, however, is usually the same: The con artists pose as ministers or members of the military whove been transferred Africa, taken their dogs with them, and discovered they cant keep the pets during their oversea stays.

They offer to pay half the cost of transporting the dogs to the consumers, Smith said. But people whove wired the money soon discover that the puppies never come.

A quick Internet search revealed other consumers have received strikingly similar e-mails about 10-week-old puppies named Bella and Max.

Consider this message a consumer posted in May regarding an e-mail she received from a Pastor Owen Green for free puppies named Bella and Max.

(Both) of them are my darling sweetheart and super spoiled, wrote Pastor Green, who said he and his wife were doing missionary work in Africa. (We) have the puppies right here with usI am giving them out because of bad condition and we're spending months for the christian (sic) mission and i don't want Bella and max to die in this bad weather.

The Missouri Attorney Generals office also posted information on its Web site back in 2007 about a similar e-mail for free puppies.

I have received an e-mail that is supposedly from a woman who is in Africa asking me to adopt her puppy, a Missouri consumer wrote the office. This seems to be a scam and I wanted to warn others about this email."

Missouri authorities told the consumer not to fall for the ruse. This is a scam and recipients of the e-mail are asked to send hundreds of dollars for shipping fees, authorities said. Scammers are successful by tugging at the heart strings of unsuspecting victims.

That advice, however, came too late for one Missourian.

Before I read up on puppy scam I got scammed, a consumer named Gloria said. I had just lost my Yorkshire Terrier. I was checking the Internet for puppies. Well, the next day I get this note on e-mail saying her name was Cathy, and she was a Yorkshire breeder. (She) just sold her last puppies to a Jim WalcoxI should connect him. Well, you might know he's in Africaa Rev.

What to do

Consumer protection experts say dog lovers can protect themselves from getting taken in puppy scams by:

• Ignoring e-mails and offers for free puppies from people living in Africa or other foreign countries;

• Never wiring money to strangers, especially those who live outside the United States;

• Never sharing personal information, including social security numbers or bank account information, with strangers or companies you didnt contact;

• Never falling for touching stories or pictures of animals. It is always best to deal with known, reputable businesses, or visit a shelter, the BBB said.

The organization also warned media outlets to be wary of accepting ads for free or low-cost puppies from anyone outside the United States. These are almost always scams, the BBB warned.

With an unemployment rate stubbornly hovering between nine and 10 percent, consumers have cut their debt and increased their savings. While that's good for consumers, it's putting stress on the economy.

One of the reasons the economy is slow to recover is consumers aren't using credit like they used to. Borrowing for mortgages fell at a 2.3 percent rate from April through June, while other forms of consumer credit declined at 2.5 percent rate, the Feds report showed.

Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit, the Fed noted last month.

While economists tend to worry about consumers' thrifty new habits, at least one group sees it as a positive sign. The National Foundation for Credit Counseling, a 50-year old organization seeking to match consumers with qualified and honest money advisors, cites its online poll showing that, since the economic crisis hit with full force, 51 percent of respondents to the poll said they had taken steps to reduce their debt.

Recession's silver lining

If there is a silver lining to the recession, it is that it has served to refocus consumers attention on their personal finances, said Gail Cunningham, spokesperson for the NFCC. When times are good, we tend to put our finances on auto-pilot. The recent financial wake-up call has been harsh, but may have been the splash of cold reality many Americans needed to regain control of their finances.

Cunningham says consumers have apparently become uncomfortable carrying debt, realizing how detrimental it can be to their overall financial well-being, and have gotten serious about doing what it takes to pay it off.

Reducing debt was by far the most frequent response to the August poll, when queried on how consumers used the economic crisis to improve their financial situation, followed by 20 percent saying that the crisis has inspired them to begin tracking their spending and develop a budget.

March survey less encouraging

The NFCCs 2010 Financial Literacy Survey (FLS) conducted in March, showed that only 37 percent of Americans have somewhat of a good idea about how much they spend or keep close track of their spending, thus having 20 percent make this positive adjustment to their financial behavior is indeed a step in the right direction.

Ten percent of those responding indicated that the crisis caused them to review their credit report.

In spite of the report being free, the NFCCs FLS found that only 34 percent of Americans had ordered their report in the past 12 months. Cunningham said reviewing the credit report is a critical component of good financial habits.

Overall, the results of the poll are encouraging, Cunningham said. Theres still plenty of room for improvement, but Americans appear to be taking positive steps toward financial stability. Nonetheless, it remains to be seen if these changes will be embraced once the economy recovers, or if consumers will have short memories and revert back to financially destructive behavior.

Chase bank and credit card customers have received an apology from the bank for last week's website outage, when the Chase website was inaccessible for more than 24 hours.

The bank's website went dark the evening of September 13, with customers receiving a message stating Our website is temporarily unavailable. We're working quickly to restore access. Please log on later." Service was finally restored around 1:00 a.m. September 15.

We recently experienced a service interruption that affected the chase.com website and mobile services, and we apologize if this created any difficulties for you, the bank said in an email sent to its 16.5 million customers over the weekend. We have resolved the problem, and want to assure you that your account information was not compromised as a result of this outage.

The bank assured customers that all account and confidential information remain secure and were not affected by the outage. The bank did not say what, exactly, caused the problem only that it was an internal issue.

According to Bank Info Security, a website dealing with security issues in the banking industry, the outage may point to underlying issues with outdated, legacy technology.

A bank spokesperson says customers who were assessed late fees because of non-payment of online bills during the outage should contact the bank.